Increasingly, goods are not made in any one country these days. But rather than this change doing damage to particular domestic economies or industries, it benefits prospects for job creation and growth generally.

That’s because these goods fit into global supply chains where different countries contribute particular skills or parts of the finished products in as efficient a way as possible.

In the 1990s, for example, 20 per cent of the content of final exports came from imports. That figure is now 40 per cent and on its way to 60 per cent by 2030. It’s more a case of “Made in The World".

For
Andrew Mackenzie
, chief executive of
BHP Billiton
, it’s a trend that can only help boost growth and jobs everywhere – in developed economies as well as in developing ones.

But it can also easily stoke community fears about domestic job losses in manufacturing – and increasingly in service industries or even agriculture – rather than being seen as an opportunity to develop new markets.

Politicians often find it difficult to persuade their voters of the advantages for them in reducing trade barriers – particularly as factories close or particular businesses become uncompetitive.

Mackenzie says he understands many people see buying local as “a patriotic thing to do". All too often though, he suggests it’s more a matter of phoney marketing about the final steps in production, rather than the more complicated reality of what has been added where.

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That extends to demands for local content rules so that a certain percentage of resources project work and material, for example, are sourced from Australia.

Drive to raise standards

Mackenzie’s argument is that the best way a company like BHP Billiton can encourage “local content" is by a commitment to work with local businesses to help raise their standards. That allows these businesses to use their expertise to compete internationally as well as having the advantage of proximity to supply BHP Billiton’s operations.

And it’s this belief in the power of greater international trade to be a force for economic and social good that has dominated much of the B20 meetings of global business leaders and G20 trade ministers in Sydney.

The horrifying fate of the Malaysia Airlines plane and international condemnation of
Vladimir Putin
’s responsibility and response have naturally overshadowed the results.

But threats of trade sanctions against Russia – and increasing sentiment for Putin to be barred from the Brisbane gathering in November – will not deter the strong G20 focus on the need for trade liberalisation. With so many economies still struggling, the B20 is promoting the potential for increased global trade as a way to most quickly boost stubbornly sluggish growth.

That’s also why the forum’s number one recommendation to achieve that 2 per cent additional growth target for G20 countries is to put into practice a “trade facilitation" agreement on customs procedures. This was formalised in Bali last year by all 159 members of the World Trade Organisation as a way of reducing red tape and corruption in customs clearance and border processes.

Labyrinthine negotiations

That clearly makes it easier for businesses to reach new markets. Achieving that is another matter. International trade negotiations often become a labyrinth of verbiage and acronyms with few clear outcomes. Mackenzie, as co-chair of the B20 task force on trade, says this is the time for G20 countries to give the Bali agreement a “real push", given they are responsible for 75 per cent of world trade. He prefers to talk about “integrity" in customs rather than corruption, but insists standardised, best-practice procedures will allow the progress of individual countries to be measured. That focus on transparency is also necessary given the growing tendency to respond to economic pressures or community complaints about the effect of competition by establishing non-tariff barriers to trade.

“Sometimes it’s done for the best of reasons but it’s short-term protectionism for long-term pain," Mackenzie says.

He includes in this assessment the growing demands from Western countries to protect their intellectual property, which is a block to the greater advantages and growth that come from free trade in ideas.

Yet all this, he concedes, is a “tough sell" for politicians, despite the mood for reducing trade barriers apparent at the B20 gathering.

Harder job ahead

“So far, so good," he says. “But the harder job is still ahead of us in terms of governments and business being advocates and committing to transparent measures that allow a bright light to be shone on all of this."

The difficulties for most governments in getting political support for economic reform is clearly a much broader problem than Canberra’s frustrations in the Senate.

Mackenzie is more enthusiastic than most about the Abbott government’s agenda: “It is pro-business and encouraging of increased investment in Australia which will preserve and increase living standards," he says.

“Even with all the difficulties, the government is off to a strong start. The important conversations have been well framed by getting growth in national income and competitiveness, and having the opportunity to realise what I think could be phenomenal decades to come."

If that sounds like “Made in Australia" optimism, the political marketing campaign sure needs work.